US Treasury Delays Currency Manipulation Report

As you all know, the US Treasury is obliged under the 1988 Trade Act to report on the currency practices of America's trading partners twice a year--in April and October. Originally targeted at Japan back in the day, US ire has of course refocussed on China. Perhaps not to ruffle China's feathers yet to put it on guard, the April findings were delayed. Back then, upcoming US-China Strategic and Economic Dialogue were the reason given for the delay. Fast forward to October's report and we have (surprise!) another delay. Supposedly, this delay is to allow erstwhile "manipulators" like China time to explain themselves at the upcoming Seoul G20 meetings:

A U.S. Treasury Department report on the currency practices of China and other trading partners will most likely come out in November after a Group of 20 summit, a Senate aide said on Friday. Under U.S. law, the semi-annual report was due to be released on Friday.

"They're doing what they did last time. So they're announcing that they're not going to issue it today," the Senate aide said. "I'm not sure if they will be explicit but I imagine post-G20" is the new timeframe for releasing the report, the aide said, referring to the summit of the 20 most developed nations in Seoul on Nov. 11. The Treasury also delayed its April 15 report to give China more time to make currency reforms. It eventually was released on July 8.

In any event, the important thing to remember is that nobody has been dubbed a currency manipulator since China was in, er, 1994--well before the explosion in US-China bilateral trade at toughly the turn of the century. From an informative Government Accountability Office (GAO) report, witness:

Since the enactment of the 1988 Trade Act, Treasury has identified three economies—Taiwan, Korea, and China—that manipulated their currencies under the Trade Act’s terms. Treasury first cited Taiwan and Korea in 1988 and China in 1992. Taiwan was cited again in 1992. Each citation lasted for at least two 6-month reporting periods for Taiwan and Korea, while China’s lasted for five reporting periods.

I am not waiting on China being branded a manipulator, but you never know.